The administration of President Biden is now reportedly attempting to blame the Jan. 6 riots and former President Donald Trump for the U.S.’s credit rating decline.
Officially downgrading the United States’ long-term foreign currency issuer default rating from “AAA” to “AA+” on Tuesday, Fitch stated that the move reflects the predicted fiscal deterioration as well as the country’s high debt load.
The ratings agency highlighted America’s “erosion of governance,” increasing deficits, and Federal Reserve tightening in its report on Tuesday. It said that it anticipates a slight recession in the fourth quarter for the American economy.
The rating, according to an administration official who reportedly spoke to FOX Business , was AAA before to Trump’s presidency.
The administration official argued that despite attempts since 2020, Fitch’s shift in evaluation of a number of parameters meant the model could not recover from its decline during the Trump administration.
The official asserted that Fitch frequently referenced January 6 as a consideration in its decision, taking into account governance instability as a component of the rating drop.
In a statement opposing Fitch’s action, U.S. Treasury Secretary Janet Yellen said the rating agency was utilizing outdated information and claimed conditions have improved during the Biden administration.
Credit ratings are used by investors to evaluate the risk profile of businesses and governments seeking funding through the debt capital markets.
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